Bennigan’s Files Chapter 7 – What happens to the franchisees?
Jack Burris is president of Red Beard Marketing, a marketing, business development and brand consulting company based in Charlotte, NC. RBM is a full service firm, and we also happen to have a lot of experience in the franchise vertical and currently work with some of the best and brightest minds in the franchise community including Franconnect, Franchise Business Review, Franchise Payments Network and FranchiseWorks LLC, all small businesses designed to help franchisors, franchisees and interested investors through the franchise process. RBM is always results-oriented.
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We interrupt our regularly scheduled “How to research and buy a franchise” with this update …
Within the last week, two large restaurant franchise systems have declared bankruptcy, Bennigan’s and Steak & Ale. Most of the major news sites did a nice job covering the story – you can read about it here:
There have even been some interesting/funny/shocking pictures to evolving from the news. Here’s one I found this morning:
The interesting fact is, most of the Bennigan’s restaurants remain open and operating. It’s just the franchisor that filed Chapter 7 and is liquidating all assets. A friend and I were discussing this and wondering what really happens to the franchisees, the real business owners. He sent me an article from BusinessWeek.com: (here’s a link to the full story)
Franchisees definitely have some struggles ahead, but the future is not totally grim. In my opinion, the biggest challenge is not the fact that corporate is bankrupt, nope, I think it is the mindset of the consumer who has all but eliminated fast casual from their diets.